LETTER TO THE EDITOR: Delaware’s answer to achieving a balanced budget

The answer to Delaware’s budget issues is elasticity. In economics there is a principle of the “elasticity of demand”. Very simply stated it is a calculation that says at what price will more people buy and at what price will less people (or zero people) buy.

Last Sunday I tried to travel from my house in Milford to my daughter’s house in Smyrna. As I jumped on Route 1 to go north, I went about two miles and traffic stopped.

I forgot that all the tourists from the beach were headed home. So, now Delaware has achieved New Jersey status, where free travel is dependent on what time it is and how many people want to do the same thing: like go to the beach.

We have the lowest gas prices around. We have no sales tax. We don’t charge to get on the beach.

I recently traveled to my sister’s house in a small New Jersey town. I picked up some flowers at a place around the corner from her house. When the vendor asked where I was from, I said Delaware. To which he said: Oh we are going to move there. I said “really” where? He said “I don’t know, but they have really low taxes so it doesn’t matter.”

So, we have built a tourist economy and a retiree building windfall, based on being “cheap”. And yet, we can’t afford our government and its services any more without raising income and other “resident” based taxes. The answer is in looking at how cheap do we need to be.

And this is where the “elasticity of demand” comes in. We are too cheap.

There needs to be a more realistic tax burden on our tourist industry and the beach real estate. We still want growth and we still want a thriving tourist industry. But, look down the short coast to Ocean City or across the bay to New Jersey. The costs are far higher and those cities are doing just fine.

I applaud the idea of reducing government to an efficient size, but let’s not put all the burden on the Delaware taxpayer to provide the infrastructure, services and schools so that the upper 1 percent of our entrepreneurs can get wealthier as the tourists and out-of-staters come here and destroy our quality of life.

I believe that we can raise the cost of buying things in Delaware, including real estate and other taxes and stem the flow of tourists to our state to a more reasonable rate — so I can get to my daughter’s house and other places without thinking I am living in New Jersey. Why not use sales tax and then deductions for Delaware residents on their taxes?

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